The Empire Carpet Company orders merchandise for $17,700, including $550 in shipping charges, from Mohawk Carpet Mills on May 4. Carpets valued at $1390 will be returned because they are damaaged. The terms of sales are 2/10, n30 ROG. The shipment arrives on May 26 and Empire wants to take advantage of the cash discount. By what date must Empire pay the invoice?
To determine the date by which Empire must pay the invoice to take advantage of the cash discount, we need to understand the terms of the sale.
The terms "2/10, n30 ROG" mean that Empire can receive a 2% discount if the invoice is paid within 10 days, and the full amount is due within 30 days. "ROG" stands for "Receipt of Goods," indicating that the payment terms start from the date when the goods are received.
In this case, the shipment arrives on May 26, so we need to calculate the payment due date from that day.
First, let's subtract the discount period (10 days) from the arrival date of the goods:
May 26 - 10 days = June 15
Therefore, Empire must pay the invoice by June 15 in order to take advantage of the cash discount.